Unifying Siloed Data To Achieve Intercompany Excellence in 3 Steps

The month-end close is a race against time, but nothing slows it down like the tangled web of intercompany accounting. For many organizations, the chaos of non-standardized as well as siloed data leads to time-consuming manual reconciliations, costly errors, delayed financial consolidation, and increased compliance risk.

Here, we map out a clear, three-step approach that will help you create a single source of truth, paving the way for streamlined processes and trusted financial reporting. This framework is designed to help finance leaders, accounting managers, and IT professionals involved in financial systems to improve efficiency, accuracy, and compliance in their intercompany transactions.

This initial step is about creating the blueprint for standardization, before implementing any technology. It lays the groundwork for robust intercompany accounting practices without onboarding new software.

Form a Cross-Functional Governance Team

To successfully standardize intercompany data, it is crucial to establish a dedicated cross-functional governance team. This team should include key leaders from Finance (CFOs, VPs of Finance, Controllers), Tax, IT, and representatives from key business entities across the organization. Their collective role is to champion the standardization project, secure buy-in from all stakeholders, and make crucial policy decisions that will impact intercompany reconciliation and financial consolidation. This ensures that all perspectives are considered, fostering a collaborative environment for effective data standardization.

Create a Standardized Master Data Policy

Defining a comprehensive and standardized master data policy is paramount. This policy must clearly outline what core data elements are required to be standardized across the entire organization. This includes, but is not limited to, the Chart of Accounts (COA), entity names, vendor masters, currency codes, and intercompany transaction types. A clean, centralized Global Chart of Accounts is not just a best practice; it is the fundamental backbone of all intercompany transactions, ensuring consistency and accuracy across all entities. Without this foundation, efforts to streamline intercompany processes will face significant hurdles.

Standardize Global Intercompany Policies

Moving beyond just setting data rules, one of the most crucial components is process standardization. This involves outlining and unifying key policies across all entities to ensure consistent execution of intercompany accounting procedures. These policies should cover invoicing procedures, clearly defined settlement terms, efficient dispute resolution workflows, and comprehensive transfer pricing documentation to ensure compliance with global regulations. Standardizing these processes reduces ambiguity, minimizes errors, and enhances the overall integrity of your intercompany.

Next, we recommend turning your focus toward implementing the systems that enforce the standards defined in Step 1, moving your organization towards a centralized intercompany solution and end-to-end automation.

Move Beyond Your ERP's Limitations

While Enterprise Resource Planning (ERP) systems are undoubtedly vital for core business operations, they often lack the purpose-built functionality required for complex intercompany management. Common ERP challenges include data silos between different instances, especially in multi-ERP environments, and the persistent need for manual journal entries to manage intercompany transactions. These limitations can hinder true data standardization and efficient intercompany reconciliation, creating bottlenecks in the financial close process.

Implement a Purpose-Built Intercompany Solution

To overcome ERP limitations and achieve true data standardization, organizations need a dedicated solution. While many attempt to bridge gaps with shared spreadsheets or custom-built tools, these approaches often fail to scale and lack the necessary controls.

This is where BlackLine Record-to-Report solutions come in. As a purpose-built platform that works with your existing ERP(s), BlackLine creates a single source of truth for all intercompany activities. It provides complete visibility to every entity involved in a transaction, enforces your standardized data policies at the source, and acts as a central repository for all intercompany transaction details and supporting documentation. By connecting and automating the entire process, BlackLine makes robust financial consolidation achievable and dramatically improves the accuracy and integrity of your R2R data.

Embrace End-to-End Automation and AI

A critical outcome of data standardization is the ability to embrace end-to-end automation, and BlackLine's Intercompany solutions deliver this by infusing the entire process with AI. BlackLine’s AI tool, Verity™, powers our reconciliation and matching capabilities, intelligently analyzing transactions to deliver near-perfect match rates and dramatically reduce manual effort.

Beyond matching, Verity Summarize™ analyzes your complex intercompany documents and creates insightful summaries for quick and easy review. This level of intelligent automation doesn't just improve efficiency and accuracy—it transforms your intercompany accounting from a manual burden into a strategic, automated asset.

This final step ensures your new standards deliver lasting value by providing continuous insight into your intercompany operations—a core feature of the BlackLine platform.

Instead of exporting data to external business intelligence tools, you can leverage BlackLine's real-time dashboards and reporting. Built directly into the solution, these tools provide finance and accounting teams with immediate, actionable KPIs. You can continuously monitor metrics like the reduction in reconciliation time, auto-match rates, the value of aged discrepancies, and the number of days to close the intercompany books.

This proactive visibility allows you to instantly identify and resolve bottlenecks before they impact the financial close. It empowers ongoing governance and ensures your team maintains the benefits of standardization not just at month-end, but every day.

Achieving True Intercompany Excellence

Adopting a structured, technology-driven approach to intercompany accounting does more than just clean up data; it transforms a historically chaotic process into a significant strategic advantage.

The outcomes are tangible and transformative. This journey from manual disarray to automated excellence leads directly to a faster, more accurate financial consolidation, significantly lower risk, and newfound confidence in your financial data. For many, it means evolving the finance team from data crunchers into strategic analysts who can drive business growth.

Just look at The Kraft Heinz Company. After their 2015 merger, they faced a complex intercompany environment with up to $30 million in discrepancies each month.

Their process was manual, uncontrolled, and complex. By implementing BlackLine's Intercompany solutions, they gained the visibility needed to identify and resolve exceptions quickly. The result? Intercompany imbalances plummeted to near zero, strengthening financial control and freeing up the finance team to focus on value-added work.

By following this framework, your organization can achieve the same level of intercompany excellence.